04/06/2021
From our e-book Dodging the bullet: a short strategic guide on avoiding civil litigation.
Chapter 3: Consult a professional early on
Throughout the first two chapters, we have made allusion to the benefits of speaking or consulting with a lawyer early on in a dispute, and in this chapter we will expand upon that point and provide examples of the problems that can arise when legal advice is sought too late into the dispute. In general, the earlier you consult a lawyer, the more likely you are to receive advice that will have a significant impact.
Don’t sign first and ask questions later.
Whether it is an employment agreement, a commercial lease, a non-disclosure agreement, an offer to purchase, or almost any other contract you can conceive of, the right time to consult a lawyer is before signing. We cannot emphasize this enough. Once you have signed, a lawyer’s role is limited to defending your rights under the agreement. If it is an unfair, unbalanced or badly drafted agreement, there is very little a lawyer can do to remedy this after you have signed.
Don’t ignore small problems.
When you are having difficulties in a professional or business relationship, it is often a sign of impending larger problems. Lack of cooperation, repeated complaints, inability to meet deadlines, ignoring terms of an agreement—these are all signs that a larger dispute is brewing. At this stage, it is often advisable to get a clearer idea of your rights. By consulting a lawyer prior to the complete breakdown of a relationship, you may learn which remedies you have at your disposal to encourage the other party to meet their obligations, or how you can withdraw from the relationship with a minimum of expense or inconvenience. Often, before a dispute has “gone nuclear”, there is room to negotiate with the other party to modify the terms of the agreement, end the relationship, or find another mutually agreeable solution. In our experience, when the small problems become large problems, there is little goodwill left between the parties which would favour negotiation. Instead, negotiation becomes about who can put the most pressure (financial, legal or otherwise) on the other party.
Cheap is expensive.
Consulting a lawyer is expensive. For this reason, many people put off consulting a lawyer, preferring to handle a dispute on their own until it gets to be too much to manage. While we can surely appreciate the desire to save money, we have seen this approach backfire in numerous circumstances, for example:
Mrs. R consulted with us due to a dispute with her business partner Mr. J. Mrs. R planned to withdraw from the company due to differences of opinion in the management of the business. Additionally, there were disputes concerning the amount of her stake in the company, the amounts owed to her by the company based on her initial investment of sums, and unpaid wages.
Prior to consulting with us, Mrs. R signed an agreement with Mr. J stipulating the amount she was to be paid based on her initial investments. However, in this agreement she also released Mr. J and the company from any suits or actions she might have against him and additionally agreed to a non-compete obligation.
Had Mrs. R consulted with us prior to signing this document, we would have been able to advise her that the sums would be owed to her upon her withdrawal from the company regardless of whether she released Mr. J and signed a non-compete. The agreement was decidedly a bad deal. By signing this agreement, Mrs. R jeopardized her rights to collect sums owed to her based on her shares in the company and unpaid wages.
In this scenario, a thirty-minute consultation prior to signing the agreement would likely have resulted in a much better deal for Mrs. R. Mrs. R would have had a much better chance of recovering all of the sums owed to her by the company and Mr. J.
Saving money in the short term by not consulting a lawyer can lead to large losses or expenses in the long term. Just as ignoring the engine light in your car can lead to a much bigger mechanic’s bill, or ignoring a lingering cough can lead to more serious health problems, the best legal solutions are preventative rather than curative.
Learn what’s important.
Another advantage to consulting a lawyer at the outset of a legal relationship, or simply for a general review of your business practices is learning what facts and what documents are important your field. Some general principles for record keeping were explained in a previous chapter, however your particular circumstances may warrant more specialized advice.
This point is particularly important for businesses that contract with individual consumers in Québec. Québec’s laws and regulations impose strict rules on businesses that contract with the general public. Small oversights can sometimes have important consequences for such businesses, including fines, penalties and a public record of any complaints lodged against you.
Additionally, laws and regulations change over the years and your standard contracts should change with them. A review of standard contracts is advisable at least once every two years, and preferably every year.
